Buy Dixon Technologies; target of Rs 18,000: Anand Rathi

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Mobile growth drivers: Vivo JV expected to add ~5m units in FY27e, exports ramp-up under MPMS, and a new Indian brand customer.
  • Margin expansion levers: Display and camera module localisation expected to add ~80-100bp to margins over two years, with further upside from operating leverage and PLI incentives.
  • IT Hardware and Telecom growth: Inventec and Gemtek JVs to drive growth in global IT hardware and data centre opportunities, with a medium-term target of ~3.5-4mn units in IT Hardware.
  • Component business: Q Tech (camera modules) and HKC JV (display) to drive growth and margin expansion.

Thesis Validation Checklist

  • Mobile volumes: Watch for stable volumes ex-Vivo, and ramp-up of Vivo JV and exports.
  • Margin trends: Monitor margin expansion from localisation and operating leverage.
  • Component business growth: Track growth in Q Tech and HKC JV, and their contribution to consolidated margins.
  • IT Hardware and Telecom traction: Look for signs of growth in these segments, driven by Inventec and Gemtek JVs.